Split Horizons

21 January 2013

I don't usually rant on this blog, but I'm afraid this may turn into one.

Housing in the UK is severely unaffordable. Housing in Oxford (where I live) is the most unaffordable city in this severely unaffordable country. Oxford's house prices now cost 14.7 times Oxford residents' incomes.

Of course, each politician will only ever pick a few of these reasons to oppose new homes, which means they support new housing somewhere else, but that location is where another politician opposes new homes. They each point to one another when the housing we need doesn't get built.

Things have got to change. Politicians must be held to account for their failure to deliver the homes we need. A whole generation feels ripped off and let down. We're angry and we're getting organised.

We've been promised that Oxford will get 7,000 more houses by 2026. Sites have been found for just 2,000 of them. Hard-pressed households need these homes and there must be a political price if they let us down.

4 December 2012

Chris Dillow writes that the richest households spend 20 times more than the poorest households on train fares, but for bus fares there is little difference between the spending of the rich and poor. This is evidence that Philip Hammond was right when he said (to much hand-wringing) the railways are a "rich man's toy".

Now, we all hear about how much train fares have increased over the years, with above-inflation rises becoming an inevitability. Every year the announcement of train fare rises is a major news story. Politicians are always keen to be seen taking a stance against train fare rises and be seen on the side of commuters.

What we don't hear about anywhere near about are bus fare rises. I don't know why, especially given the impact of these fare rises hit the poorest households far more than train fares. As Will Straw pointed out on Left Foot Forward a few months ago, bus fares surged even more than rail fares during Labour's period in government.

There are far times more bus journeys taken than train journeys. There were 5 billion bus journeys in England alone last year, compared to 1.3 billion rail journeys across the whole of Great Britain.

Despite this, MPs have basically ignored the relentless increase in bus fares. Compare the Google results for "MP rail fares" and "MP bus fares" to see how little attention the latter receives.

If our politicians really want to show they're on the side of the hardest-pressed, they ought to pay a lot more attention to the buses.

9 July 2012

Enfield North's MP Nick de Bois has put his name to a letter from a bunch of Conservative MPs trying to block the long-needed House of Lords democratisation.

The letter calls for much more of parliament's time to be used for "full and unrestricted scrutiny" of the Bill. So despite having spent nine months consulting on a draft bill, these Tories want to spend even longer trying to make sure the reforms that all parties promised are the right reforms.

13 June 2012

The back of Lib Dem membership cards leaves us in do doubt what our core values are - liberty, equality and community. Our mission is to ingrain these values into British society. As part of this, we need them ingrained into the heart of government.

However there is no Ministry or Office which is dedicated to looking after our liberty. If we're to entrench our values while we're in government, what better way than to create an office and a government minister fighting the corner of liberty.

13 May 2012

Peter Bone and his right-wing ilk have been touring the studios this week making their concerns over House of Lords Reform known. Their key argument is that using Parliament's time to push through reform now would be a huge distraction from the the Coalition's main job of reducing the deficit and getting the economy back on time.

What's odd is that earlier this parliament, Peter Bone and his comrades Philip Hollobone and Christopher Chope were very busy presenting a long list of Bills containing a whole host of populist right-wing measures.

I don't doubt that they're entitled to raise issues that they think are important. But surely, by their own argument, arguing about the finer details of abolishing the TV licence, providing tax relief on private medical insurance and so on was a distraction for the government which ought to be spent dealing with the economy?

Or could it be that they don't believe their own arguments and are saying anything to avoid having to bring a bit more democracy to our beleagueredpolitical system?

Don't get me wrong, they're absolutely within their rights to raise concerns about the proposed reforms to the House of Lords (although let's not forget that the manifesto they stood on for the previous three elections committed Conservative MPs to Lords reform). But can't they do it on an honest basis?

Then again, maybe they've had a change of heart and now don't want the government to be drawn into Parliamentary battles over legislation that isn't aimed at the economy. Therefore I'm sure they'll avoid taking up Parliament's time by trying to impede the House of Lords Reform Bill's progress.

20 January 2012

Zoe Williams's article on top vs. bottom-end supermarket salaries is interesting and full of good intentions, but I fear it doesn't lead us anywhere useful.

Her argument is that supermarkets don't pay their staff a proper wage (perhaps because of in-work state benefits), which allows them to make excessive profits and pay their CEOs an exorbitant salary. To these CEOs she cries out, "To grab so much in excess of what you could ever spend or need, at a cost of so much hardship, to so many people, defies comprehension."

She also gives us lots of handy numbers: the supermarkets' workforce is 900,000-strong, and the CEOs' salaries are as follows:

• Justin King, the CEO of Sainsbury's, receives £3.2m a year;• Philip Clarke of Tesco, £6.9m;• Dalton Philips, of Morrisons, £4m;• Andy Clarke of Asda's pay is not in the public domain.

I'll be generous and assume that Clarke earns as much as the 'market leader', i.e. the Tesco CEO salary of £6.9m. That gives us a total CEO salaries of the big four supermarkets of £21m.

Redistributing that CEO income equally amongst the full supermarket workforce would give each supermarket employee just £23 extra per year. While I don't dispute that Every Little Helps, I'm unconvinced that less than 50p per week would make a significant difference to the lives of ordinary shop-floor workers.

There are serious inequalities in our society which need tackling, but all this focus on people's incomes distracts us from the real source of systemic unfairness - inequality of wealth.

Meanwhile, if we are to aim for high levels of social mobility, then while education and equal opportunities are vital, they are only enablers to the only way social mobility is ultimately achieved - income.

31 December 2011

Alcohol is an addictive drug, with 1.5 million dependent users in the UK. There is nothing liberal about drug addiction. A life enslaved to a chemical is not a life with liberty.

Drinking is also a primary means of recreation and a national pastime. It is illiberal to restrict the recreational behaviour of adults when it is only themselves that may come to any harm.

Inevitably, when the issue of alcohol minimum pricing is raised, liberal opinion is split. Ewan Hoyle has made the case in favour, while Mark Thompson has made a harm reduction-based arguments against. As much as it matters, I support open-minded trials of alcohol minimum pricing to discover whether the benefits of such a policy would outweigh the negatives.

However, there seem to me to be flaws with alcohol minimum pricing within what its proponents wants to achieve. A price floor means that the alcohol supply chain gets to take all of the additional revenue that will be made from alcohol sales. This money may well end up being spend on more aggressive advertising campaigns by producers - something of an own-goal when the aim is to reduce alcohol consumption.

It would be far better if the government simply* raised alcohol duty. That way, a price floor would be created through tax, but the revenue would be taken by the government to fund rehabilitation services and education on the dangers of alcohol.

Clearly it is politically difficult to raise alcohol duty by such a large amount, so I would also make alcohol exempt from VAT at the same time. VAT is favoured by economists because of the way it encourages efficiency in the supply chain, but when it comes to addictive drugs, efficiency of supply should be of least concern. As a nice bonus, a switch from VAT to duty would also help put pubs and supermarkets on a level playing field. It is common knowledge that alcohol is cheaper in supermarkets than at the pub. Supermarkets are the epitome of an efficient supply, while pubs provide the added value of a social space in which alcohol can be consumed. With VAT, pubs pay more tax than supermarkets on alcohol that is equally as addictive.

* I say "simply", but the system of alcohol duty is far from it. The IFS has produced the chart below which shows the ridiculously complicated effective rates of alcohol duty currently imposed. All forms of alcohol should be treated like spirits, with taxes levied at a consistent rate relative to its ABV strength. This chart should be subtitled, "when lobbyists take control of the tax system".

25 October 2011

The ACMD has today called for further punitive laws to be enacted to tackle the growing number of new psychoactive substances being marketed an consumed in the UK. It wants analogues of already illegal drugs to be banned in the assumption that they will have similar effects.

The coalition agreement does state that the Lib Dems will enable legislation that "will introduce a system of temporary bans on new ‘legal highs’ while health issues are considered by independent experts."

We have already done that. This exact legislation was part of the Police Reform and Social Responsibility Act which passed earlier this year.

Liberal Democrat policy was recently brought up-to-date at this year's conference with the passing of a motion on protecting the community from drug harms. The party's stance is now crystal clear. Any further drug policy legislation that can be voted for by Lib Dem MPs must involve:

• an independent panel to assess our current drug laws, • a switch to the 'decriminalisation' approach which has shown beneficial outcomes in Portugal, • or a legal framework to enable a strictly controlled supply of cannabis.

Now we must be practical. We should not outright ignore the work of the ACMD - that was the attitude taken during the dying years of the Labour government. However, if the Conservatives wish to progress with any further drug restrictions with us in government, they must also be open to considering some of our party's drug policies too.

3 October 2011

Maybe the 50p rate of income tax paid by the highest earners on incomes over £150,000 is bringing in a few hundred million a year. Maybe it isn't. Either way it won't be raking in billions.

What the debate about the 50p rate is all about generating headlines without really changing much. The government fiddles about with a few hundred million to grab headlines all the time. The government will spend £680bn this year. Throwing a fraction of one per cent of its tax raising and spending power changes nothing fundamental about the impact government has. The Coalition's commitment to raising the personal allowance to £10,000 (as promised by the Lib Dems) is a much bigger shift that will cost the Treasury £17bn once it has been realised (and benefits lower earners the most). Now that's what I call income tax reform.

There is nothing wrong with rewarding success - cutting the 50p rate to 40p would do this a very little bit. There is also nothing wrong with wanting to see the richest pay more of their fair share - keeping the 50p rate would do this a very little bit.

But given the trivial size of the change, it's frustrating is seeing progressives get drawn into this debate.

Yes, income tax is progressive and is directly linked to the ability to pay. Yes, the marginal rates look stupid when plotted on a graph and a few tweaks would make it technically fairer:

However, any changes to income tax of this nature would only affect a tiny amount of the money earned by the richest 5% shown in this graph:

Getting into a heated debate about the top end of income tax is like arguing over the position of a few grains of sand in a sandcastle, when what the argument should be about is what overall shape the sandcastle should actually be.

As an example, take property. The richest 5% of property owners have a hugely disproportional amount of wealth compared to the rest of us.

Fiddling with income tax will do nothing to redress this inequality. If anything it will distract attention from the fact that such a huge wealth disparity exists.

It is measures like Vince Cable's mansion tax that would really get the ball rolling on redistributive taxation.

(Hat-tips: Adam Corlett for the marginal income tax rate graph and ALTER for the income and property distribution charts from this PDF.)

We now know that these two parties would form a Coalition government. In October they announced their Comprehensive Spending Review. Its figures show that the Coalition will cut £81bn from government spending by 2015.

I know my readers are intelligent souls, so I'll leave you to work out whether £81bn is closer to the Lib Dem £80bn or the Tory £96bn.

Let's not forget Labour in this. The IFS calculated they would make £82bn of spending cuts, only the slightest bit different from the Coalition's £81bn. Labour now oppose every single cut the Coalition is making.